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TEACHING NOTE
BP Blowout: The Aftermath of the Gulf Oil Disaster
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This case illustrates the following themes and concepts discussed in the chapters listed:
Theme/Concept Chapter
Stakeholder analysis 1
Government regulation 7
Sustainable development 10
Managing for sustainability 11
Crisis management 19
Case Synopsis
This case, written especially for this edition by Daniel Jacobs, author BP Blowout: Inside the Gulf
Oil Disaster (Washington, D.C.: Brookings Institution Press, 2016), describes the aftermath of the
2010 blowout of BP’s Deepwater Horizon well in the Gulf of Mexico. The blowout resulted in the
death of eleven people and the discharge of more than three million barrels of oil and was the most
TEACHING TIP: WHERE TO USE THE CASE IN THE COURSE
This case is integrative, in that it draws on many themes of the text. It may be used at the end of the
TEACHING TIP: VIDEOS
Several videos may be used in conjunction with this case.
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2
Deepwater Horizon and may be shown at the beginning of the class session to focus student attention
Discussion Questions and Answers
1) What stakeholders were impacted by BP’s actions, and how were they impacted?
One way to approach this question is to form students into six teams, with each team responsible for
answering this question for one stakeholder, filling in a form that can later be collected by the
instructor. Students should be able to complete this task quickly (in 5 to 10 minutes). Each team can
The case discusses the impact of BP’s actions on these stakeholders:
Local businesses
• Commercial fishing: the U.S. government closed large areas of water to fishing, shutting
down more than a third of Gulf waters after the spill.
• Tourism: tourists cancelled their trips to the region, not just to beach areas that had been
Local governments
Community residents
• Loss of jobs and related psychological impacts.
Employees of BP (including its contractors and rescue and clean-up workers)
• 11 workers on the Deepwater Horizon died, and 115 were injured or traumatized.
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chemical dispersants. These effects included high blood pressure, fluctuating blood sugar,
and breathing and intestinal problems. Cleanup workers were also at greater risk for
depression and anxiety.
TEACHING TIP: ENVIRONMENTAL JUSTICE
Shareholders
The case estimates the total cost of the disaster to BP at $66 billion—more than any company has
ever paid for a disaster of its making. Much of this cost was borne by the company’s shareholders in
Taxpayers (public)
Because some of BP’s costs (but not its criminal and civil penalties) were deductible, the American
taxpayer subsided part of the cost. The company estimated it would save around $56 billion over
time, because of these deductions.
TEACHING TIP: TAKEAWAY
The instructor may wish to introduce the next question by asking: Why didn’t we include “the
environment” or “ecosystems” as a stakeholder in the exercise we just completed? Can the
environment be considered a stakeholder? Chapter 1 defines a stakeholder as “persons and groups
2) What were the environmental costs of the disaster, and how can these be measured?
The case reports that the disaster “took a terrible toll on the environment.” Impacts discussed in the
cases include:
• Beaches and wetlands were contaminated with oil and dispersants.
TEACHING TIP: TAKEAWAY
3) Do you think that the legal consequences faced by BP, its employees, and the false
claimants were appropriate, and why or why not?
The legal consequences to BP were costly.
• The company pled guilty to manslaughter and other charges to resolve the criminal case,
• The federal government also prosecuted hundreds of individuals for filing false claims
against BP. One hundred and nine people received prison sentences for filing fraudulent
4) Do you think it is a company’s responsibility to prevent a disaster of this type or the
government’s (or both)? Why?
5) Describe changes in the U.S. regulation of deepwater drilling since the disaster. What
approach to regulation do you support, and why?
6) What lessons should the oil industry, business in general, government, and civil society
draw from this case?
